Q1 2011 | RetailThAilAndBangkok RETaIL MaRkET                                         Bangkok Retail Market               ...
Bangkok Retail MaRket RePoRt | Q1 2011                                                          AddiTiOnAl Supply by QuART...
Bangkok Retail MaRket RePoRt | Q1 2011                                          bReAkdOwn Of ReTAil SpAce in bAngkOk by lO...
Bangkok Retail MaRket RePoRt | Q1 2011OuTSide Of bAngkOkan area in the province of Samut Prakan but adjacent to the Bangko...
Bangkok Retail MaRket RePoRt | Q1 2011demAnd – TAke-up                           bReAkdOwn Of hiSTORicAl TAke-up RATe Of R...
Bangkok Retail MaRket RePoRt | Q1 2011demAnd dRiveRS fOcuS                                                         cOnSume...
Bangkok Retail MaRket RePoRt | Q1 2011ReTAil SAleS                                                            ReTAil SAleS...
Bangkok Retail MaRket RePoRt | Q1 2011RenTAlS                                                 RenTAl RATe duRing The yeAR ...
Bangkok Retail MaRket RePoRt | Q1 2011SwOT AnAlySiSSTRengThSRetail centres are places not only for shopping but entertainm...
Bangkok Retail MaRket RePoRt | Q1 2011                                         AppendixCOLLIERS INTERNATIONAL | P. 10
Bangkok Retail MaRket RePoRt | Q1 2011ReTAil lOcATiOnSReTAil mARkeT cATegORieS                                            ...
Bangkok Retail MaRket RePoRt | Q1 2011 cOllieRS inTeRnATiOnAl ThAilAnd mAnAgemenT TeAm                                    ...
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Bangkok Retail Market Report Q1 2011

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Supply growth slowing q/q for Q1 2011 with just around 14,180 sq m being completed, all being community malls.

Rentals rates escalated q/q by around 4% and take up increased by approximately 1% for the same period. Consumer confidence and spending over the past year are positively affecting the retail sector as a whole.

The trend is not only the development of new retail centres but the renovation of older buildings with outdated retail designs and mix. This flight to the top can only be of benefit to customers and the sector as a whole.

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Bangkok Retail Market Report Q1 2011

  1. 1. Q1 2011 | RetailThAilAndBangkok RETaIL MaRkET Bangkok Retail Market execuTive SummARy Supply growth slowing q/q for Q1 2011 with just around 14,180 sq m being completed, all being community malls. Rentals rates escalated q/q by around 4% and take up increased by approximately 1% for the same period. Consumer confidence and spending over the past year are positively affecting the retail sector as a whole. mARkeT indicATORS The trend is not only the development of new retail centres but the renovation of older buildings with outdated retail designs and mix. This flight to the top can only be of benefit to customers and Q4 2010/Q1 2011 the sector as a whole. new Supply The area encompassing the northern part of the neighbouring province of Samut Prakan along RenTAlS with Bang na, which borders the province in Bangkok’s suburbs, is increasingly being seen as a strategic hub for the wholesale and logistics market due to its location close to the city, airport OccupAncy and Eastern Seaboard.www.colliers.co.th
  2. 2. Bangkok Retail MaRket RePoRt | Q1 2011 AddiTiOnAl Supply by QuARTeR Source: Colliers International Thailand Researchapproximately 14,180 sq m was completed in Q1 2011, with nearly 10,400 renovation for six months from 14 February to the end of July 2011. Thesq m located in Suburban Bangkok and the rest in the outer City area. closing of this center has led to other retail centers attempting to attract customers from Central Ladprao by launching many campaigns anda section of Central World, including Zen department store, is still promotions.undergoing renovation following the damage caused by the fire in May2010, however CPn announced the closure of Central Ladprao forTwo new community malls opened in Q1 and these remain a very popular contains eclectic architectural designs.and fashionable sector of retail business, especially in the SuburbanBangkok area. one is the “amorini Boutique Lifestyle Hall” with on 21 March, Big C started the process to rebrand the Carrefourapproximately 5,000 sq m which had its official grand opening on 21 hypermarkets which the company purchased in 2010. Big C have alreadyMarch 2011 and is located in Suburban Bangkok – East. The other is announced that 34 branches out of the total of 42 will undergo a“The Circle Ratchapruk” in Suburban Bangkok – West area. This centre rebranding makeover but the remainder will be sold as they are alreadyis on the Ratchapruk road in amongst the new high end villa developments in close proximity to existing Big C supercentres.that exist or are being constructed. The centre is on one level andCOLLIERS INTERNATIONAL | P. 2
  3. 3. Bangkok Retail MaRket RePoRt | Q1 2011 bReAkdOwn Of ReTAil SpAce in bAngkOk by lOcATiOn, Q1 2011 Source: Colliers International Thailand ResearchRetail developers are trying to develop projects closer to their catchment the attraction, as in most cities, of shopping in the centre. Before theareas in the suburban areas, where more people live. However only half advent of cars for the masses the centre was the area that people flockedof total retail space in Bangkok is located in the suburban Bangkok area; to for the retail experience. The vast majority of luxury shops are locatedwith every department store in Bangkok located in the urban area due to in the City area.fuTuRe Supply cumulATive fuTuRe Supply in bAngkOk by yeAR And cATegORy, AS Of Q1 2011 Source: Colliers International Thailand ResearchThe future supply scheduled to be completed in 2011 amounts to more in Q4 2011 with around 150,000 sq m of retail space. approximatelythan 300,000 sq m, with approximately 217,000 sq m as shopping malls. 63,000 sq m is expected to be completed in 2012.The majority will come from Central Rama 9 which is scheduled to open COLLIERS INTERNATIONAL | P. 3
  4. 4. Bangkok Retail MaRket RePoRt | Q1 2011OuTSide Of bAngkOkan area in the province of Samut Prakan but adjacent to the Bangkok Road. In addition a developer from China plans to invest up to 45 billionMetropolitan area will become a shopping hub. In the eastern part of baht in a major wholesale trade centre which will be named “Thai –Bangkok along Bangna – Trad Road, Mega Bangna by Siam Future China International Products City” on Bangna – Trad Road nearDevelopment Plc. and IkEa with a total area of approximately 400,000 Suvarnabhumi International airport with a total space of two million sqsq m is scheduled to be opened in Q3 2012 However IkEa with around m with the first phase of 700,000 sq m scheduled to be opened in40,000 sq m of store space is slated to open by the end of 2011. Currently october 2012. However this project has come under some controversyretail statistics for this area are not contained in this report. from Thai traders who feel the project will crowd Thai products out of the market with an influx of Chinese made ones.other significant retail centers can be found in the same vicinity, such asSB Design Square, Index Living Mall, Tesco Lotus, Big C in CentralBangna as well as Seacon Square and Paradise Park on SrinakarinCOLLIERS INTERNATIONAL | P. 4
  5. 5. Bangkok Retail MaRket RePoRt | Q1 2011demAnd – TAke-up bReAkdOwn Of hiSTORicAl TAke-up RATe Of ReTAil SpAce by lOcATiOn, Q1 2010 – Q1 2011 Source: Colliers International Thailand ResearchSmall increases were registered in all zones for Q1 2011. The City and growing consumer confidence after the difficult local and global eventsouter City areas were up by around 0.7 - 0.9% while in the Suburban of 2009 and 2010.area an increase of approximately 1.1% was recorded. This reflects the TAke up RATe Of cuRRenT Supply by cATegORy, Q1 2011 Source: Colliers International Thailand ResearchTake up rate of all categories, except supporting retail, is more than 95%. account for this as this means less people using the outlets. In someSupporting retail commands only 85% and can be explained by the situations the space for supporting retail is too large for the size of thereliance on custom from workers in the offices that the retail component office it supports and some convert to office use or other functions suchsupports. Lower levels of office occupancy over the past few years as educational/training centres. COLLIERS INTERNATIONAL | P. 5
  6. 6. Bangkok Retail MaRket RePoRt | Q1 2011demAnd dRiveRS fOcuS cOnSumeR cOnfidence index (cci) Source: Bureau of Trade and Economic Indices, Colliers International Thailand ResearchThe slump in consumer confidence for much of 2008 and 2009 was the trend and Q4 was the highest quarter in the last four years. In Q1 2011result of the global Financial Crisis, which caused Thailand’s gDP to this fell from Q4 by approximately 24%, due to many factors, such as theshrink. While confidence began to assume a sustained upward path in unrest in the Middle East and north africa, seismic disasters in Japanthe winter period of 09/10, this was severely dented following the and Myanmar, rising oil prices and floods in southern Thailand.protests in april and May. However Q3 witnessed a return to the risingCOLLIERS INTERNATIONAL | P. 6
  7. 7. Bangkok Retail MaRket RePoRt | Q1 2011ReTAil SAleS ReTAil SAleS index by QuARTeR Source: Bank of Thailand, Colliers International Thailand Research Remark: Year 2002 = 100, E = Estimated by Colliers International ResearchThe protests in Q2 2010 had impacted the retail market but in Q3 2010 recent numbers indicate a fall in spending during the protests and a pick-the overall pattern of spending returned, and this shows optimism for the up in Q3 2010. The fourth quarter, the last quarter of the year, includesfuture. For Q4 2010, the Bank of Thailand forecast retail sales showing the Christmas and new Year festivals, so credit card usage volume inthe highest levels in the last five years, even compared to the previous this quarter of every year is usually the highest.Christmas and new Year holiday seasons.Credit card usage over the past five years has increased by around 60%,and these cards are more often used in organized retail centers. TheTRendSdigiTAl ReTAilS and will promote more than 30,000 products in 11 categories. They also plan to increase the number of products available for online shopping to about 100,000 next year.The national Electronics and Computer Technology Center (nECTEC)reported the number of internet users in Thailand in 2010, based on Central group launched their own shopping online website, www.central.survey results from www.truehits.com, to be more than 21 million, an co.th in which TnT will be responsible for the logistics. Big C also haveincrease of nearly 15% from 18.3 million people in 2009; and according a website for shopping online www.atbigclick.com, but buyers must goto the nECTEC report the number of internet users is at around 33% of to a Big C outlet to pick up the product. In addition to the major retailthe population in Thailand with a greater number expected for Bangkok. players there are new entrants into the market such as “Uber Mall” theRetail developers are therefore looking at opportunities to expand their first 3D shopping mall online and www.2010MegaSale.com by kasikornsales channels, by opening their own online stores. However the number Bank. a survey by Master Card Worldwide found that Thai people areof Thais who shop online is still lower than many countries in asia. The interested in shopping online, with an average value of products boughtair conditioned shopping experience in Thailand reflects a way of life that online increasing to 18,150 baht per person, more than the last survey ofincludes a significant entertainment component which allows family and approximately 5,000 baht.friends to enjoy their time together out of the tropical heat and theinternet will have difficulty competing with this for some time to come.In the last quarter of 2010 two big players in retail business stepped intothe online shopping business. The Mall group officially launched the Monline Department Store (Mods: www.mods.co.th) on December 8 2010 COLLIERS INTERNATIONAL | P. 7
  8. 8. Bangkok Retail MaRket RePoRt | Q1 2011RenTAlS RenTAl RATe duRing The yeAR Q1 2010 – Q1 2011 Source: Colliers International Thailand ResearchThe rental rates in every area increased around the 4% mark q/q for Q1 of renovations of older properties.2011 reflecting the growing confidence in the retail sector and the affectCOLLIERS INTERNATIONAL | P. 8
  9. 9. Bangkok Retail MaRket RePoRt | Q1 2011SwOT AnAlySiSSTRengThSRetail centres are places not only for shopping but entertainmentlocations in their own right. Bangkok scores well in this regard and cangrow from this in further enhancing the retail experience.Even in times of uncertainty shopping still remains a key focus of people’slives as well as a necessary activity and therefore the sector is moreimmune from cyclical events than other sectors.Many centres are undergoing renovation and this adds to the retailexperience as well as increasing rental rates. Improved design helps toincrease traffic flow to the upper floors of a modern retail centre andtherefore this allows higher rental rates to be charged.weAkneSSeSMany retail centers in Bangkok have been open for more than 15 yearsand many more are in a state of decay, obsolete, or with bad layout andretail mix, therefore developers and owners are starting to renovate or rearrange the layout and concept again in the next few years.With limited players in the retail market the design of retail centres mayneed to be refreshed. More innovation in the architecture of retail centres,especially Community Malls would help to invigorate the market and addto the Bangkok shopping experience.OppORTuniTieSThe opening up of aSEan economies culminating in the asian Economicarea in 2015 could lead to a greater demand for wholesale centers tocater for growing trade. The Chinese project in Bang-na is a reflectionof this.The development of new condominiums in previous greenfield or olderdevelopment areas presents continued opportunities for the creation ofcommunity centres catering for these new population clusters.Future relaxation of zoning restrictions based on a new census shouldallow for the further development of larger scale retail and entertainmentcentres outside of the city centre.ThReATSCurrent global economic uncertainties and a looming general electionstill haunt sentiment going forward.Future restrictions on the development of large scale retail centres in thecentre could stymie growth in the main shopping area of Bangkok.However a move from quantity to quality by the constant innovativeredevelopment of existing retail space could lead to further dynamism.Consolidation of the Hypermarket sector into effectively two main playerscould lead to more monopolistic practices. However a duopoly can bejust as competitive and consumers have other choices such asdepartment stores and community malls if price becomes a problem. COLLIERS INTERNATIONAL | P. 9
  10. 10. Bangkok Retail MaRket RePoRt | Q1 2011 AppendixCOLLIERS INTERNATIONAL | P. 10
  11. 11. Bangkok Retail MaRket RePoRt | Q1 2011ReTAil lOcATiOnSReTAil mARkeT cATegORieS 5) Specialty Stores 6) entertainment complex (this does not include entertainment areas inThe organized retail market in Thailand can be divided into seven main shopping malls, as these represent an intrinsic part of the shopping mallcategories, based on size, characteristics, goods sold, and pricing: mix)1) Shopping mall / Shopping centre 7) Supporting Retail2) department Store (figures for this report include stand-alone storesonly; those located in shopping malls are not included) Note: For the purposes of the report, retail refers to organized retail services and3) hypermarket excludes traditional single proprietor outlets often located in shophouses and markets4) community mall consisting of predominantly small traders. Also, supermarkets have been excluded from this report. COLLIERS INTERNATIONAL | P. 11
  12. 12. Bangkok Retail MaRket RePoRt | Q1 2011 cOllieRS inTeRnATiOnAl ThAilAnd mAnAgemenT TeAm 480 offices in 61 countries on 6 continents RETaIL SERVICES United States: 135 • The third largest commercial asharawan Wachananont | Senior Manager real estate services company in Canada: 39 the world Latin america: 17 aDVISoRY SERVICES | HoSPITaLITY • The second most recognised asia Pacific: 194 Jean Marc garret | Director commercial real estate brand EMEa: 95 globally PRoJECT SaLES & MaRkETIng • US$2 billion in annual revenue Monchai orawongpaisan | Senior Manager • over 2 billion square feet under management RESIDEnTIaL SaLES & LEaSIng • over 15,000 professionals napaswan Chotephard | negotiator oFFICE & InDUSTRIaL SERVICES narumon Rodsiravoraphat | Senior Manager aDVISoRY SERVICES CollieRS inteRnational thailand: napatr Tienchutima | associate Director Bangkok office 17/F Ploenchit Center, REaL ESTaTE ManagEMEnT SERVICES 2 Sukhumvit Road, klongtoey, Bandid Chayintu | associate Director Bangkok 10110 Thailand Tel +662 656 7000 InVESTMEnT SERVICES fAx +662 656 7111 nukarn Suwatikul | associate Director emAil info.th@colliers.com Wasan Rattanakijjanukul | Senior Manager Pattaya office 519/4-5, Pattaya Second Road (opposite Central Festival RESEaRCH Pattaya Beach), nongprue, Banglamung, Chonburi 20150 antony Picon | associate Director Tel +6638 427 771 Surachet kongcheep | Senior Manager fAx +6638 427 772 emAil info.pattaya@colliers.com VaLUaTIon & aDVISoRY SERVICES nicholas Brown | associate Director Phachsanun Phormthananunta | associate Director Santipong kreemaha | Senior Manager Wanida Suksuwan | Manager PaTTaYa oFFICE Mark Bowling | Senior Sales Manager Supannee Starojitski | Senior Business Development ReSeARcheR: ReSeARcheR: Manager / office Manager Thailand Thailand antony Picon Surachet kongcheep associate Director | Research Senior Manager | Research emAil antony.picon@colliers.com emAil surachet.kongcheep@colliers.com This report and other research materials may be found on our website at www.colliers.co.th. Questions related to information herein should be directed to the Research Department at the number indicated above. This document has been prepared by Colliers International for advertising and general information only. Colliers International makes no guarantees, representations or warranties of any kind, expressed or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. any interested party should undertake their own inquiries as to the accuracy of the information. Colliers International excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability for loss and damages arising there from. Colliers International is a worldwide affiliation of independently owned and operated companies. accelerating success.www.colliers.co.th

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